Entrepreneurial Environment

One question that Sam Jones raised elicited a surprisingly wide variety of positive responses. And that question was whether Kansas City leadership has, over time, created a positive environment for small business in general and MBEs and WBEs in particular.

Diane Forte reports that resources in the region are abundant. Wendall Bailey, Nancy Zurbuchen and Don Gardner look on.

For Andre Hinton, the answer was an unqualified “yes.” After selling out of a previous business, Hinton had the means to move wherever in the country he chose. After visiting his brother-in-law in Kansas City, and assessing the lay of the land, he chose to start up here. “This is the most entrepreneurial area I have run across,” Hinton said.

Compared to the East Coast, where Hinton had been working, the Kansas City area has, in his estimation, fewer regulatory hurdles to jump and more active SBA support. As he also noted, “Companies that have started up here have given back.” He cited as the most obvious example the Kauffman Foundation, which grew out of Ewing Kauffman’s Marion Labs.

As a second noteworthy example of giving back, Mary Lou Jacoby cited the Helzberg Mentoring Program, a byproduct of Barnett Helzberg’s philanthropy made possible through his own entrepreneurial role with Helzberg Diamonds. In Mexico, Jacoby noted, there are no mentoring programs beyond the local Chambers of Commerce.

“Kansas City is number one in this area,” she enthused. Jacoby also credited the work of the Kansas City chapter of NAWBO, the National Association of Women Business Owners and other support groups based on the idea of entrepreneurs helping other entrepreneurs.

As a past winner of NAWBOs National Bridge Builder Award, Nancy Zurbuchen has been able to work with and visit 25 other NAWBO chapters. “I came to realize,” Zurbuchen said, “that Kansas City, for its size, has an amazing amount of resources.”

Bill Torres, representing the Hispanic Contractors Association of Kansas City, agreed that Kansas City is a great place to live and start a business. In fact, as he pointed out, the national Hispanic Chamber of Commerce was founded here.

If there is a problem, there are almost too many and too disparate resources for an entrepreneur to even know where to begin. “Many don’t realize what is here,” said Diane Forte, who counted herself among those who were slow to see the opportunities. Ron Harland found himself learning of new resources as this very Ingram's session progressed. Although Harland looks at Kansas City as a small market, “We have more support organizations than the larger ones,” he said.

Given the resources, Zurbuchen has been particularly pleased with the work of KCSourceLink. For the record, KCSourceLink connects a network of nonprofit resource organizations to one another and to existing and emerging small businesses, and helps those businesses get assistance on marketing, loans, business plans and other common challenges. Its region extends across state lines from Topeka to Jefferson City.

Sam Jones told of how the SBA had put a good deal of money into a national entrepreneur center in Orlando, Florida, that boasted of between 28 and 40 partners. “Not a bad start,” said Jones, a wee bit patronizing. As he knew, KCSource-Link had many more partners, 140 at last count.

Angels and Other Needs

Ingram’s Jack Cashill (left) and Sam Jones of SBA, Andre Hinton of AH Inc. and Joe Davis observe the dialogue.

For all of its entrepreneurial virtues, Kansas City is, in some ways, “still behind the curve.” So remarked Bill Torres, who lamented what he saw as unnecessary barriers that keep private dollars from flowing freely towards min-ority contractors. “Let’s turn to corporate America and break down those barriers,” said Torres. “This is a great town, but it could be even better.”

“Kansas City still sees a gap for women and minorities to grow businesses to size,” affirmed the Kauffman Foundation’s Marianne Hudson. One of the gaps that she identified is in investment capital. She and the Foundation have been plotting the development of a “better capital market,” specifically the encouragement of “Angel” investing and mentoring.

Marna Courson saw the need for a local coalition of Angel Investors to assert itself and make its offerings known. Others welcomed the mentoring and educational help needed to attract those investors. “We know we have the potential to grow,” said Marilyn Neblett of #1 Limo Service, speaking not only for her own company but for her fellow participants, “but a lot of us don’t really know what investors are looking for beyond the financials.”

As Hudson pointed out, the Kauffman Foundation already has established itself as the “center point” for Angel investment groups in the United States. The Foundation has educated more than a thousand Angels toward the goal of making them better investors capable of adding more value. Two of those groups work out of Kansas City.

Robbin Reynolds inquired as to whether Angels invest individually or in groups, and the answer was essentially both. They tend to make decisions individually but review deals together, a model that has worked well across the country. The average group investment, said Hudson, runs about $350,000.

Ron Harland expressed an interest in finding “user-friendly” Angels, “investors, not predators.” Hudson reassured him that, although Angels do expect a return, they get involved because they “love the process.”

As to what attracts investors, Hudson noted that they have a particular interest in high growth fields like IT and bioscience, although there are retail examples as well. In general, the money flows to “those who can show innovative products and services.” The challenge, added Hudson, is to create such innovative enterprises.

Sam Jones asked Hudson what to tell such groups to interest them in Kansas City. “They care about entrepreneurs who have the potential to grow and be strong,” said Hudson.

“Build it,” she said of the Angels, “and they will come.”